US Regional Employment 2023 Comparisons

Global entities, including those operating in Georgia, continue to take a hard look at anti-discrimination and anti-harassment policies, and commitment to social justice and diversity in light of events in Georgia and elsewhere that highlight ongoing issues in these areas. Increased polarization and politicization of issues are a challenge to employers as well.

On an increasingly illuminated stage, with pressure to be transparent, employers are re-examining how they manage their workforces and interact with their local and broader communities.

Many employers have long been on a path of reframing how they view sensitive issues, with many shifting the focus from simply preventing illegal conduct to adopting a proactive approach in promoting a more respectful and inclusive work environment. Now global businesses have taken their commitment to diversity, inclusion and equity beyond their own walls, emphasizing their commitment to societal change.

Traditional training has focused on legal requirements, civility, respect and bias (including unconscious bias) and on educating workers on multiple avenues to identify concerns to employers.

While US employers have adopted and implemented long-standing policies prohibiting harassment based on legally protected characteristics, the attention placed on this issue by the “Me Too” movement and the publicity generated in recent high-profile cases have initiated a seeming cultural shift from preventing conduct that is illegal to promoting a respectful and inclusive work environment. This shift can be seen in training being provided by employers (more focused on civility training and respect), as well as the focus on anti-harassment policies. The promotion of environments that encourage reporting and offer multiple avenues to bring concerns forward, coupled with an appropriate response to the behaviors at issue, are important components of such a program.

Georgia does not have a state statute protecting employees based on their political beliefs or affiliation. 

Given the current divisive political climate, most private sector employers limit political expressions at work through the use of no-solicitation and no-distribution policies. In addition, most employers have social media policies which typically provide that the employer’s social media should not be used for political purposes, and if an employee is using their personal social media platforms for political expression, the employee must make it clear that the views expressed are their own personal views, and not the views of their employer.

Inevitably, some conflicts nevertheless arise and employers must be certain that although employees may disagree on political issues, all are expected to abide by the employer’s workplace policies, which may include civility policies, anti-harassment policies and other policies governing appropriate workplace conduct.

Worker Adjustment Retraining and Notification Act of 1988 (WARN)

Unlike other states, Georgia does not have any state-specific plant closing or mass layoff law requiring advance notice of a plant closing or mass layoff, but employers must comply with federal laws potentially implicated in connection with layoffs, reductions in workforce and/or restructuring. The federal Worker Adjustment Retraining and Notification Act of 1988 (WARN) governs plant closings and mass layoffs, requiring most employers with 100 or more employees to provide 60-day advance notification in the event of a plant closure or mass layoff as defined in the WARN statute. 

Protected Characteristics

In addition, employers should expect that employees may seek advice of counsel in connection with any layoff, reduction in workforce or restructuring to see if specific decisions were based on a category protected by federal law, such as race, age, sex, etc. Naturally, decisions on employees impacted by any such layoff, reduction in workforce or restructuring should not be based on an employee’s protected characteristic. In addition, employers should review their decisions to ensure that the selection criteria do not have a disparaging impact on a protected characteristic, such as race or age. The Equal Employment Opportunity Commission (EEOC) has noted that the Age Discrimination in Employment Act applies to practices that are apparently neutral, but that might harm older workers more than younger workers, and that apply to groups of people, such as procedures used to identify persons to be laid off in a broad reduction in the workforce.

Severance Agreements

To mitigate the potential risk of employment-related claims that may arise from a layoff, restructuring or reduction in workforce, employers should consider the possibility of a severance agreement. Although severance agreements are not required by state law, such agreements may include a waiver and release of all employment-related claims.

Communication Strategy

Finally, employers should develop a communication strategy concerning the basis for the layoff, reduction in the workforce or restructuring, both for those employees who may be laid off, as well as employees that are retained, as any layoff, reduction in workforce or restructuring is likely to create uncertainty and anxiety for employees that are retained. Such uncertainty could potentially lead to additional attrition in the workforce, or employees may seek the protection of an outside organization such as a labor union.

In McLaren Macomb, a Michigan hospital offered a group of employees severance pay in exchange for signing severance agreements. The severance agreements included non-disparagement and confidentiality obligations. The NLRB held that these provisions were unlawful because they interfered with Section 7 rights. In the eyes of the NLRB, “public statements by employees about the workplace are central to the exercise of employee rights under the [National Labor Relations Act]”, and contractual provisions that prohibit disclosure of the agreement’s terms have a chilling effect on employees’ ability to exercise their Section 7 rights.

Under McLaren, an employer violates the National Labor Relations Act (NLRA) by executing an agreement containing such language. However, the decision also held that an employer violates the NLRA simply by offering an agreement that makes severance benefits conditional on the waiver or restriction of an employee’s rights under the NLRA, even if the employee does not sign the agreement. 

The NLRB’s McLaren decision only applies to “employees” as defined under the NLRA, which excludes supervisors, managers and executives. Therefore, employers can continue to protect their reputation and/or confidential information by including non-disparagement and confidentiality provisions in agreements with these categories of employees. In addition, employers generally may protect their confidential information by narrowly drafting confidentiality provisions to protect true trade secrets and confidential business information or business “know-how”, while not interfering with employees’ protected activity.

The McLaren decision is simply one example of how the current NLRB is following through on President Biden’s commitment to be the “most pro-union President ever”. Although it has not moved as quickly as many pro-labor adherents had hoped, the NLRB has steadily limited or reversed decisions made by the Trump administration’s NLRB. A few notable examples include:

• Lion Elastomers, 372 NLRB No 83 (May 1, 2023) provides greater protection to employees who engage in profane or abusive conduct towards management while also engaging in protected activity.
• Stericycle, Inc, 372 NLRB No 113 (August 2, 2023) reversed the NLRB’s previous Boeing, Co decision concerning whether policies contained in an employer handbook violate the NLRA. Under Stericycle, the NLRB will evaluate work rules from the perspective of an “economically dependent employee” to determine whether they have a “reasonable tendency to chill” protected conduct. If so, the rule violates the NLRA unless the employer can demonstrate that (i) the rule advances “legitimate and substantial business interests”; and (ii) that interest “cannot be achieved by a more narrowly tailored rule”.
• Atlanta Opera, Inc, 372 NLRB No 95 (June 13, 2023), The Atlanta Opera, Inc expanded the definition of “employees’ under the NLRA and found that makeup artists, wig artists, and hairstylists were “employees” covered by the NLRA, and not independent contractors. The NLRB found that entrepreneurial opportunity is no longer the “animating principle” of the independent contractor test. The ruling has broad ramifications for any companies using independent contractors, such as those in the gig economy. Unlike employees, independent contractors are not covered by the NLRA. Based on this case, it may now be more difficult to classify workers as independent contractors under the NLRA.

Response unions have dramatically increased their organizing activity post-pandemic. Unions are organizing and seeking to organize companies that historically have not been targets of organizing attempts or that have traditionally been non-union, such as Starbucks, Apple and Google.

Support for Unions

With respect to organizing campaigns, it is expected that unions will continue to attempt to capitalize on worker militancy and concerns over health and safety issues. The pandemic may have caused younger workers, in particular, to re-evaluate the things that they value the most. Several observers have noted that much of the recent union success is with workforces consisting of younger, college-educated workers in service-sector jobs, feeling that they are overworked and underpaid. Public sentiment has swung back towards unions as well. A recent survey found that about 66% of Americans now say they support unions, the highest approval rating since 1965. Unions are big businesses, with combined revenues in 2020 of USD18.3 billion (85% from membership dues), according to a recent study.

To the extent an employer desires to remain union-free, the importance of hiring strong HR and employee relations staff who can establish a positive culture and get buy-in from the managers, cannot be overstated. The vast majority of union campaigns start because of perceived toxicity in the workplace (eg, favoritism or no outlets for employees to express their views). Being union-free vests the organization with the autonomy to make decisions about policies and other terms and conditions of employment.

Time Taken to Reach a Collective Bargaining Agreement

Reaching a collective bargaining agreement with a newly established union can also be a lengthy process. According to a recent analysis by Bloomberg Law, on average, it takes 409 days between the time a union is certified and the time a collective bargaining agreement is finalized with the employer. During this period, employers are not permitted to make unilateral changes in employee wages, hours and working conditions. Accordingly, many employers strive to remain union-free in order to enjoy maximum flexibility.

Recent Union Activity

The pro-labor decisions coming from the NLRB will likely only continue to embolden union organizers and workers alike, as will recent publicized union successes at the bargaining table, with unions having negotiated significant wage increases with employers such as UPS and Cleveland-Cliffs. Unions have also shown continued militancy, as reflected by the number of employees who have engaged in strikes in 2023. According to Cornell University School of Industrial and Labor Relations, over 320,000 workers had participated in strikes in the US in 2023 as of the end of August – significantly more than the roughly 224,000 workers who participated in strikes in 2022. It should be noted that these figures include the thousands of actors and screen writers on strike against the TV and film industry led by the Screen Actors Guild and the Writers Guild of America. These strikes have received considerable publicity, as did shorter strikes against Spirit Aerosystems and John Deere, which achieved significant wage increases for employees represented at those companies.

There are different types of service arrangements in the USA. As a result, it is important that the parties agree on the terms and conditions at the outset of their relationship, and ensure that the agreement reached is consistent with applicable law. Failing to do this properly at the commencement of the engagement not only creates unnecessary uncertainty, it increases the organization’s legal exposure with regard to future disputes.

The COVID-19 pandemic made employers more comfortable and reliant upon independent contractor relationships. In addition, the pandemic forced employers to revisit the acceptability of remote work for some or all of its workforce, particularly for positions historically performed at corporate offices.

Employment

The default service relationship in the USA is that of employer and employee. Most states, including Georgia, are “at-will” employment jurisdictions, meaning either party (the employer or the employee) can terminate the relationship at any time and without having to provide a reason – provided, of course, that the termination decision is not prohibited by law (ie, due to discrimination or retaliation). Georgia Statute O.C.G.A. § 34-7-1 provides that an at-will employee generally may be terminated for any reason, and the employee may not recover from the employer in tort for wrongful discharge. In some situations, employees may have contracts specifying the terms and conditions of their employment. Such contracts are not required in the USA, but may be warranted depending on certain factors, such as the type of employee (ie, an executive).

Barring a formal written contract, terms regarding the employment relationship are typically relegated to documents such as offer letters, job descriptions, employment policies, or employment handbooks. To avoid any unintended obligation to employment for a specific term or for termination only under certain circumstances (eg, “good cause”), employers should incorporate a carefully crafted disclaimer throughout employment documents.

Joint Employment

The NLRB issued a new rule in February 2020 over the issue of joint employment. Under the rule, to be a joint employer, a business must possess and exercise substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees. The rule defines key terms, including what are considered “essential terms and conditions of employment”, and what constitutes “direct and immediate control” regarding each of these essential employment terms. The rule also defines what constitutes “substantial” direct and immediate control, and makes it clear that control exercised on a sporadic, isolated or de minimis basis is not “substantial”.

Evidence of indirect and/or contractually reserved control over essential employment terms may be a consideration for finding joint-employer status under the rule, but it cannot give rise to such status without substantial direct and immediate control. Importantly, the rule also makes it clear that the routine elements of an arm’s length contract cannot turn a contractor into a joint employer. As noted in 2.1 Aggressive Approaches by the National Labor Relations Board (NLRB), both the NLRB and the Department of Labor have indicated recently they will revisit this issue via new rule-making.

Independent Contractors

The importance of control in a relationship also extends to the determination of whether a worker is an independent contractor. The law in this area is rapidly evolving and there are no rigid rules for determining whether a person is an independent contractor or an employee. Various jurisdictions and administrative agencies in the USA have adopted different tests to determine whether an individual is an independent contractor. Georgia passed a new law effective July 1, 2022 changing the statutory definition of “employee” for the purposes of unemployment compensation. Under Georgia Act 809, it is likely more workers will qualify as “employees” based on the more expansive definition. An individual will qualify as an “employee” unless the employer demonstrates the individual is free from the control or direction over the performance of services and is customarily engaged in an independent trade, occupation, profession or business. The Act sets forth seven factors to be considered in making this determination, which are whether an individual:

• is not prohibited from working for other companies or holding other employment contemporaneously;
• is free to accept or reject work assignments without consequence;
• is not prescribed minimum hours to work or, in the case of sales, does not have a minimum number of orders to be obtained;
• has the discretion to set their own work schedule;
• receives only minimal instructions and no direct oversight or supervision regarding the services to be performed, such as the location where the services are to be performed and any requested deadlines;
• when applicable, has no territorial or geographic restrictions; and
• is not required to perform, behave or act in a manner related to the performance of services for wages which is determined by the commissioner to demonstrate employment, in accordance with this Code section and such rules and regulations as the commissioner may prescribe.

Exceptions and Provisions

There are exceptions under the Act for music industry professionals such as a recording artist, songwriter, lyricist, composer, composition proofer, recording producer, recording director, musical engineer, musical mixer, musician, or vocalist; a music publicist; a radio promoter; or a photographer who works on recording photo shoots, album covers, or photographs for other press or publicity purposes.

There are also special provisions in the Act related to “ride sharing” and similar gig-economy providers. Such providers must have a written contract with an individual that expressly provides that the company will not:

• unilaterally prescribe specific dates, times of day, or a minimum number of hours during which an individual is required to be logged into the network company’s online enabled application or platform;
• terminate such contract for non-acceptance, and will not require an individual to accept,
• make any specific transportation service request or delivery service request for services as a condition of maintaining access to the company’s online enabled application or platform; provided, however, that such company may require, as part of such contract, a certain percentage of transportation service requests or delivery service requests to be accepted;
• restrict an individual from performing transportation or delivery services through other companies, except while the individual is performing services through the first company; and
• contractually restrict an individual from working in any other lawful occupation or business.

The Biden administration has signaled its approval of the California ABC test which, if implemented by the Department of Labor, would make it more challenging for employers to classify their workers as independent contractors. If adopted by the Department of Labor, it is likely that such an interpretation would be followed by the Georgia federal courts tasked with interpreting federal employment laws. In addition, as noted in 2.1 Aggressive Approaches by the National Labor Relations Board (NLRB), the NLRB recently issued a ruling in The Atlanta Opera, Inc case where it found that makeup artists, wig artists and hairstylists were “employees” covered by the NLRA, and not independent contractors. Based on this case, it may now be more difficult to classify workers as independent contractors under the NLRA.

Internships

Internships have been the subject of considerable scrutiny in the past few years, notably from the standpoint of whether private businesses can rely on unpaid interns. The US Department of Labor’s Wage and Hour Division has developed a test for evaluating whether an individual constitutes a “trainee” (intern) for the purposes of the Fair Labor Standards Act (FLSA). The following factors are considered in determining whether a for-profit employer can lawfully utilize an unpaid intern:

• the extent to which the intern and the employer clearly understand that there is no expectation of compensation – any promise of compensation, express or implied, suggests that the intern is an employee – and vice versa;
• the extent to which the internship provides training similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions;
• the extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit;
• the extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar;
• the extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning;
• the extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern; and
• the extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

US Citizenship and Immigration Services (USCIS) recently announced a new Form I-9, Employment Eligibility Verification, and the end of the COVID-19 flexibilities on July 31, 2023. All employers who leveraged virtual document examination under the temporary policy to complete Forms I-9 are required to conduct a second review of documents in order to reach compliance by August 30, 2023. Since that announcement, USCIS has implemented a new Form I-9, and has made certain aspects of the COVID-19 flexibilities permanent.

The new Form I-9, released on August 1, 2023, is reduced in size from two pages to one page, and must be used from November 1, 2023. USCIS has made several changes to the Form I-9 itself in an effort to increase its technology offerings and create efficiencies. Certain employers who use E-Verify may take advantage of the “alternative review” procedure to update Forms I-9, following virtual examination during the period of COVID-19 flexibilities. Not all employers are eligible to use the alternative review process, and employers should consult with their immigration compliance counsel prior to utilizing this procedure. 

The COVID-19 pandemic continues to negatively impact the ability of employers to attract and retain foreign nationals. The pandemic, and the federal government’s response, disrupted virtually every aspect of the US immigration system. The processing of immigration benefits by USCIS has dramatically slowed, and visa processing abroad by the US Department of State (DOS) has been impacted by lack of available appointments.

Corporate Structure and Relationships

Employers are finding it increasingly difficult to sponsor foreign nationals for employment in the US. Increased scrutiny by USCIS and DOS has resulted in lengthy delays in the adjudication process and higher rates of visa denials. The pandemic has resulted in even longer delays due to the temporary closure of local immigration offices for in-person services and the suspension of routine visa services by DOS.

Employers often consider the H-1B and L visa when sponsoring foreign nationals for employment in the US. However, due to increased scrutiny and changes in the immigration processes for the above visa classifications, employers may also wish to consider the H-1B1, E, and TN visas in addition to the H-1B and L.

H-1B visa

The H-1B visa is generally reserved for specialty occupations – positions requiring the theoretical and practical application of a body of highly specialized knowledge that requires the attainment of a bachelor’s degree or higher in a specialty, or its equivalent, as a minimum for entry into an occupation in the US. New H-1B petitions are sometimes subject to an annual lottery due to high demand and USCIS has conducted a lottery in recent years. In 2020, the lottery underwent a significant processing change that resulted in the implementation of an additional fee for employers. This classification has experienced increased scrutiny in recent years, resulting in lengthy processing delays and increased rates of denial. Of note, while several presidential proclamations have limited the ability of foreign nationals to enter the US on various visa classifications, Presidential Proclamation 10052 specifically restricted the ability of employees on the H-1B visa to enter the US to initiate or resume employment.

L visa

The L visa is generally reserved for international companies seeking to transfer executives, managers or specialized workers to the US. As with the H-1B visa, the L visa has experienced heightened scrutiny, resulting in lengthy processing delays and higher rates of denial. In addition, a change in the immigration process for renewals has added to the length of time required for a renewal and increased costs.

Due to the challenges of securing visa sponsorship for foreign national employees through H-1B or L visa classifications, employers are exploring alternatives to include the H-1B1, E and TN visa classifications.

H-1B1 visa

The H-1B1 visa is reserved for citizens of Chile and Singapore. As with the H-1B visa, the H-1B1 is generally restricted to specialty occupations and, like the H-1B visa, the H-1B1 is attractive to many employers due to the relative ease and reliability of the H-1B1 sponsorship process. This visa classification is generally a more reliable and faster option than the H-1B visa.

E visa

Another option for sponsorship of foreign national employees is the E visa. The E visa category includes treaty traders (E-1), treaty investors (E-2), and Australian specialty occupation workers (E-3). To qualify as an employee of a treaty trader or treaty investor, the employee must share the same nationality as the employer, and the employee must be engaged in the duties of an executive, manager or specialized worker. The E-3 visa applies to Australian nationals performing services in a specialty occupation similar to the H-1B visa category, but is more easily attainable.

TN visa

The TN (NAFTA) visa allows employers to sponsor citizens of Canada and Mexico for employment in the US in a professional capacity. While the North American Free Trade Agreement (NAFTA) has been replaced by the United States-Mexico-Canada Agreement (USMCA), the USMCA retains the TN visa classification. To be eligible for this, the profession must be noted on the treaty (list) and the foreign national employee must satisfy the qualifications for eligibility for employment in that profession.

The pre-hire and interviewing process is a significant opportunity for employers to identify and hire the strongest candidate for the positions in question. Before the employment interview, employers should consider requiring applicants to complete an employment application that accurately describes prior educational and work history, reasons for leaving prior employment, references, and any special skills. Additional considerations should be made early on in the process as to the job description, and in particular, whether the position is remote, on-site or hybrid to assess position criteria.

Application Information

As a best practice, the employment application should include certification by the applicant that they have provided complete, accurate and truthful information on the application. The employment application should also contain an affirmation of the at-will nature of the employment relationship, and employers should refrain from making verbal or written assurances of “long-term” or “permanent” employment, or other statements that could adversely affect the employer’s ability to successfully assert at a later time that the employee was employed at-will. In addition, to the extent that any post-offer testing is to be conducted, employers should include that information in the employment application to ensure that applicants are aware of the requirements and to allow them to request reasonable accommodations, if needed.

The employment application and the interview process, as a best practice, should not ask questions or elicit information about legally protected characteristics such as age, national origin/race, religious practices, pregnancy or desire to have children, sex, sexual orientation or gender identity, or medical conditions or disabilities, and similarly should avoid questions that would elicit this type of information.

Background Checks and Physical Assessment

Criminal checks

A common aspect of the hiring process is a limited criminal background check for the successful candidate. While this due diligence provides benefits for employers, such as a defense to a negligent hiring claim and the avoidance of a high-risk hire, this is an area of the law that is currently evolving on the national, state and local level. The Equal Employment Opportunity Commission (EEOC) has taken the position that, given that minorities are disproportionately adversely affected with regard to convictions and arrests, criminal convictions should only be considered if they relate to the position being sought. Employers should consider doing a case-by-case analysis, and review the type of conviction, the date of the conviction, the nature of the job in question, and any exceptional circumstances before making a decision about employment based on a criminal conviction. At the same time, employers in industries such as childcare/education, mortgage and banking have stricter requirements related to background checks, prohibiting the hiring of employees with felonies. Employers in these industries need to navigate through both state law and EEOC concerns.

Employers using background checks (including credit reports and criminal records) to make employment decisions – including hiring, retention, promotion or reassignment – must comply with the federal Fair Credit Reporting Act (FCRA) administered by the Federal Trade Commission (FTC).

Physical checks

The Americans with Disabilities Act (ADA) also imposes restrictions on employers with regard to what information can be sought or discussed during the hiring process. The ADA generally prohibits employers from any pre-employment inquiries about an applicant’s medical condition. Thus, the employer may not ask any questions to elicit medical information prior to a conditional job offer being made.

After a conditional offer of employment has been made, the employer may conduct a post-offer medical examination, provided that this is required of all applicants for the position. However, to withdraw an offer of employment, the employer must be able to demonstrate that the individual is unable to perform the essential functions of the job in question, even with reasonable accommodations. Thus, to the extent that post-offer testing is to be completed, employers should ensure that the components of the test directly correlate to the essential functions of the position.

Employers may also require physical agility testing. Depending on how these tests are constructed, they may or may not be considered a “medical examination” under the ADA. For example, if an agility test simply requires an employee to pick up products and carry them a certain distance, such a test would not be a medical examination. However, if the tester measures the employee’s physiological response to the activity (eg, pulse and blood pressure), the test may be considered a medical examination subject to the ADA restrictions on such testing. Even these agility tests must be job-related and consistent with business necessity; in essence, accurately depicting the physical demands of the position in question. As this is a highly technical area of the law, employers are advised to seek legal assistance with these determinations.

The Genetic Information Nondiscrimination Act (GINA) similarly imposes restrictions on employers during the hiring process (and afterward), making it unlawful for employers to request genetic information with respect to employees. Because genetic information is defined broadly to include family medical history, employers should ensure that any post-offer medical examinations, even those conducted by occupational doctors, do not elicit this information.

Finally, the ADA requires employers to provide reasonable accommodation to disabled applicants to permit them to participate equally in the hiring process. While reasonable accommodations may take many forms, such as having an interpreter for a hearing-impaired applicant or administering a test in an accommodated format, the employer is not required to “carve off” essential functions of the position in question.

Diversity, Equity and Inclusion Issues

Many employers seek to have diverse representation in the workforce as part of their commitment to equal employment opportunities. Although Georgia has state laws banning specific types of discrimination, such as O.C.G.A § 34-1-2 which prohibits age discrimination, the state does not have an agency that investigates or litigates these types of claims. Therefore, employees typically turn to the protections found under federal employment statutes that prohibit discrimination, and pursue claims before the EEOC and/or the state and federal courts. 

While having diverse workforce goals is laudable, most employers must comply with federal laws prohibiting discrimination based on specific protected characteristics (such as race, religion, sex, age, national origin, etc). This means that it is illegal to take into account race, gender, sexual orientation, disability or other protected characteristics during the hiring process, and doing so subjects the employer to potential liability. Employers should also avoid using workforce race or sex data to make specific hiring decisions, and should avoid quotas based on protected characteristics, such as having a quota of a department consisting of 50% women or minorities. However, workforce data such as racial data is of value to employers, as it may identify underrepresented populations and discriminatory barriers in the hiring process. Once identified, the employer can consider means of targeting these underrepresented populations, such as targeting geographical areas where underrepresented populations may live, to broaden the applicant pool available to the employer.

How AI Is Used in the Hiring Process

The use of artificial intelligence (AI) in the hiring process has become more common for large employers. To understand the potential legal issues posed, however, it is important to understand how AI is used. Employers have been using a type of AI for decades, albeit in a form most people now take for granted – text-searching applications or resumes received. This process can now be automated with an algorithm so that a computer culls job applications by performing the text search. Certain online recruiting services such as LinkedIn Recruiter and ZipRecruiter also use algorithms to search the social media profiles of millions of potential candidates. AI can also be used in the interview process through programmed chatbots which automatically ask a candidate a series of pre-programmed questions intended to discern information pertinent to the organization. Finally, AI can also be used to compare the experience of different candidates and can recommend which candidates to extend offers to, and the salary range to be offered to a candidate. In a nutshell, AI is particularly useful for routine tasks that involve sifting through large quantities of data.

AI’s Potential Legal Pitfalls

Although AI is sometimes viewed as a preferred vehicle for eliminating potential bias, such as during job interviews, the reality is that AI has its own set of potential legal pitfalls. First, because AI is programmed by humans, the AI code developed may have the programmer’s bias (conscious or unconscious) built into it as the programmer determines what data or parameters will be used. Courts have allowed claims to proceed under federal employment laws based on unconscious bias if the bias can later be proven to have resulted in intentional discrimination against a protected classification. Similarly, Title VII of the Civil Rights Act of 1964 recognizes a legal claim for disparate impact when a selection criterion adversely impacts a protected class. Back in 2018, Reuters reported that Amazon had scrapped an experimental AI recruiting tool when it determined that the algorithm used by the recruiting tool had learnt to disfavor applicants using the term “women”. An AI-hiring practice could also implicate the ADA if an algorithm makes inquiries into an applicant’s physical disability, mental health, or clinical diagnosis. These inquiries are prohibited by the ADA in connection with a pre-employment candidate assessment.

Evolving Legislation

Employers remain eager to harness AI to eliminate potential subjectivity and to automate certain aspects of the recruitment and hiring process. However, the technology is still considered in its infancy and the risks are abundant, which likely explains why many states have either passed or are considering legislation to protect candidates. For example, in 2020, Illinois enacted the Artificial Intelligence Video Interview Act effective January 1, 2020. The law imposes limitations on employers that use AI for candidate video interviews. Other states are considering legislation to limit the discriminatory use of AI, or have created task forces to study the issue. This area of law is likely to continue to evolve as more employers turn to AI in the hiring process. However, Georgia does not currently have any laws governing the use of AI in the hiring process.

During 2020 and 2021, employers’ use of restrictive covenants to limit their employees’ post-employment competitive activities became a more volatile issue. Presently, there is no federal law governing an employer’s use of restrictive covenants. However, on July 9, 2021, President Biden issued an executive order on “Promoting Competition in the American Economy” which, among other things, was critical of employers’ use of non-compete agreements. The executive order directed the FTC to “consider working with the rest of the Commission to exercise the FTC’s statutory rulemaking authority under the Federal Trade Commission Act to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility”.

At the time of writing, the FTC had not yet promulgated any regulations addressing this issue. In addition, in early 2021, a bill titled “The Workforce Mobility Act of 2021” was introduced in the senate which, if passed, would eliminate the use of non-compete agreements in most employment relationships.

State Law

Due to the absence of governing federal law, the enforceability of restrictive covenants in the USA is heavily dependent upon state law, which varies dramatically on this subject. Some states consider non-compete and non-solicitation covenants to be void and unenforceable under almost all circumstances, whereas other states will enforce contractual restrictions, but only if they meet specific criteria set forth by state statute. Other states will enforce such restrictions, but only reluctantly and only if the terms are reasonable and narrowly defined. However, reflecting growing skepticism concerning employers’ use of restrictive covenants, a growing number of states have adopted legislation limiting their use. In the past few years, Illinois, Virginia, Maryland and Massachusetts have adopted legislation limiting employers’ use of non-compete agreements.

In Georgia, post-employment restrictive covenants are governed by state law. The law covers non-compete covenants, customer non-solicitation covenants, and covenants regarding non-disclosure of confidential information. The statute contains detailed requirements about the scope of such agreements, the time period for which they may be effective, the geographic limitation of the restrictive area, and other safe harbor provisions. This year, the Georgia Court of Appeals held that a non-solicitation of employee covenant must contain a geographic limitation to be enforceable. Georgia employers should discuss the provisions of the statute with legal counsel.

Trade Secrets

In the absence of a written covenant, information that comes within the scope of a “trade secret” is protected from “misappropriation”, which is defined as the acquisition of a trade secret by a person who knows or has reason to know that the trade secret was acquired by “improper means” (theft, bribery, misrepresentation, breach, or inducement of a breach of a duty to maintain secrecy, or espionage) or the disclosure or use of a trade secret without authorization by someone who used improper means to obtain the information or who knew, or had reason to know, that the information was protected by law. Georgia adopted the Trade Secrets Act of 1990. The Georgia version of the law can be found at O.C.G.A. § 10-1-761.

Medical Information

COVID-19 has altered the application of some traditional privacy rules. Generally, conducting medical tests or examinations on employees is prohibited. However, in the wake of COVID-19, the Centers for Disease Control and Prevention (CDC) and state and local authorities permit reasonable measures – including temperature checks, asking questions regarding potential COVID-19 exposure, and even testing to check if an employee has an active case of COVID-19 – to help curb the community spread of the virus. Indeed, under the ADA, mandatory testing to check for an active case of COVID-19 (but not to check for COVID-19 antibodies) is permissible if this is “job related and consistent with business necessity”. Early on in the pandemic, the EEOC issued guidance that COVID-19 testing always met this ADA requirement. However, on July 12, 2022, the EEOC issued new guidance providing that COVID-19 testing is no longer automatically compliant with this ADA standard. Instead, employers must assess whether testing is job related and consistent with business necessity based on current pandemic and their particular workplace circumstances. The guidance includes a number of factors to be considered, including:

• current levels of community spread;
• the vaccination status of the employee population; and
• the ease of transmission of current variants and the possibility of severe illness from current variants.

The current guidance is available here or on the EEOC’s website (eeoc.gov) under “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws”.

Furthermore, while all medical information (including information related to COVID-19) must normally be kept confidential, an employer may discreetly disclose the name of an employee who is COVID-19 positive to a public health agency. Not surprisingly, this has created some tension in the workplace, as employees’ fears have led them to ask whether co-workers they work with have tested positive for COVID-19 or otherwise exhibited symptoms of COVID-19. Despite these understandable concerns, the employer remains obligated to protect the privacy of an employee’s medical information even during contact tracing or notifying employees of possible exposure to COVID-19.

Electronic Equipment

Employers that provide electronic equipment for employees to use in connection with their job duties (ie, laptops and internet access) are generally permitted to adopt policies notifying employees of the right to monitor the use of such equipment and remind employees of their ownership interest in these devices. Employers can also impose reasonable requirements on how the employees can use the equipment. For the most part, these policies have been upheld on the grounds that employees have no reasonable expectation of privacy while using company equipment. On December 17, 2019, the NLRB ruled that an employer’s rule prohibiting use of its email system for non-business purposes did not violate employees’ rights under the NLRA. The decision in Caesars Entertainment Corp d/b/a Rio All-Suites Hotel and Casino, NLRB Case No 28-CA-060841, overturns the Board’s 2014 decision in Purple Communications, which held that work rules prohibiting employees from using employer-provided email systems for union activity were presumptively invalid.

Surveillance Programs

Monitoring employee activities in the workplace is generally permitted under federal and state law; however, an employer must disclose to employees in writing that they have the right to do so and may do so at their discretion. Moreover, employers should exercise caution in doing so and should make sure that their actions are reasonable. Discreet surveillance programs have long found favor with the courts. The key question is whether the surveillance constitutes an invasion of the employee’s right to privacy. For the most part, the tort of invasion of privacy requires a plaintiff-employee to show an intentional invasion that is highly offensive to a reasonable person and that occurs where there is a reasonable expectation of privacy. Employees typically have no reasonable expectation of privacy on a factory floor. However, the same is not true for a bathroom or locker room. Thus, an employer can conduct video surveillance of work areas, lunchrooms, offices, parking lots and any other areas of its business, with the exception of those areas where employees have a reasonable expectation of privacy from visual observation (such as restrooms and showers).

Laws of the Jurisdiction

Unlike other states, Georgia does not have state-specific laws prohibiting discrimination based on legally protected characteristics, with the exception of O.C.G.A § 34-1-2 which prohibits age discrimination, and the Georgia Equal Employment for Persons with Disabilities Code of 1981, O.C.G.A. § 34-6A-1, et seq, that generally tracks the federal Rehabilitation Act of 1973 and the Americans with Disabilities Act of 1990, (prohibiting discrimination because of an individual’s disability). However, most Georgia employers are subject to a number of federal laws that prohibit discrimination, harassment or retaliation based on legally protected characteristics or legally protected activity. Legally protected characteristics include age, gender (potentially including sexual orientation and/or gender identity), pregnancy, race, color, national origin, disability, military or veteran status, genetic information, religion, and citizenship status. In addition to federal laws, many states – as well as local government entities such as cities, counties and townships – have enacted laws that expand the coverage of legally protected characteristics. Thus, it is important to understand and abide by all the laws in the jurisdiction in which the employer is located.

Impact of Social Justice Movements

Recent social justice movements have pushed global entities, including those operating in the US, to take a hard look at anti-discrimination and anti-harassment policies, and commitment to social justice and diversity. Employers have been re-examining how they manage their workforces and how they interact with their communities. Indeed, global employers that are not committed to these initiatives – including a commitment to make it clear that they oppose racism, sexism and other forms of discrimination – risk damaging their global image, and damaging their ability to recruit and retain employees, particularly a diverse workforce. The pervasiveness of social media brings scrutiny and rapid societal response, implicating companies and employees who can be tied to them.

Racial and social justice movements have placed a spotlight on discriminatory actions and practices, including systemic racism and implicit bias, leading employers to provide additional support and training to their existing workforces in an effort to mitigate or eliminate bias, thereby enhancing their abilities to recruit, hire and develop diverse workforces.

While US employers have adopted and implemented long-standing policies prohibiting harassment based on legally protected characteristics, the attention placed on this issue by the “Me Too” movement and the publicity generated in recent high-profile cases have initiated a seeming cultural shift from preventing conduct that is illegal to promoting a respectful and inclusive work environment. This shift can be seen in training being provided by employers (focused on civility training and respect), as well as the focus on anti-harassment policies. The promotion of environments that encourage reporting and offer multiple avenues to bring concerns forward, coupled with an appropriate response to the behaviors at issue, are important components of such a program.

Training

Employers would be well advised to conduct periodic supervisor training that identifies the types of behaviors that are inappropriate in the workplace, the methods to report concerns, supervisors’ role as a member of the management team (both in communicating with applicants and employees, and in the investigatory process), and how to appropriately document and issue any discipline needed. Employees should also receive training on the applicable policies, the types of behaviors that violate the policies, the mechanism to report concerns, and the non-retaliation provisions of the policies. Many employers are also including diversity training to foster an inclusive and respectful workplace, and to discuss varying perspectives employees may bring to the workplace as a result of their life experiences.

The Occupational Safety and Health Administration (OSHA) is the federal agency charged with enforcing all applicable federal safety laws and regulations. Roughly 22 states have applied for, and been granted, authorization to establish state plans to administer and enforce the applicable safety and health compliance program for private employers in their states. Georgia has not been granted authorization for a federal-approved occupational safety and health program, and therefore the safety and health complaints of employees are processed through OSHA. The COVID-19 pandemic has resulted in a large number of complaints from employees that their employer is not providing a safe work environment, which has challenged the agency given its current resources. Most of these complaints are processed through the “general duty” clause under OSHA that requires employers to furnish a place of employment free from recognized hazards that are causing, or are likely to cause, death or serious physical harm to employees.

In Georgia, an employer that establishes a “drug-free workplace program” in compliance with state law is eligible for a discount on its workers’ compensation insurance premiums. The program must include all the required provisions in Georgia law.

At-Will Terminations

If an employee is at-will, this should be disclosed to them upfront so there are no surprises if their employment is terminated at a later point. The employer should – at least – be able to point to evidence documenting that employees were advised of their at-will status at the commencement of employment. Best practice is to ensure that at-will statements are included in the employment application, offer letters, and employee handbooks and acknowledgment forms.

Terminations by Operation of Contract and Severance

If the parties have entered into an employment agreement that addresses how the employment relationship will end, the terms of the agreement will normally govern the situation. Employers would be well advised to pay close attention to the language of the employment agreement, especially where there are defined terms addressing termination for “cause”, “change of control” and provisions describing the renewal of the contract. Employees in the USA are typically not entitled to severance unless the employer agrees to provide it pursuant to the terms of an agreement or policy.

Separation Agreements and Releases

In the event employees are offered severance, this will customarily be contingent upon them entering into a release waiving any and all claims they may have against the company. Such release agreements are treated as contracts, and generally will be subject to enforcement in a similar manner. One caveat, however, concerns waivers for employees aged 40 or over, pursuant to federal law. The federal Age Discrimination in Employment Act (ADEA) has many procedural requirements in order for a severance agreement to be lawful. Employers should consult employment counsel to ensure compliance.

Beyond federal law, some states require additional provisions to ensure that a release is valid. As such, the current state of the law in the applicable jurisdiction must be reviewed before any release is prepared and presented to an employee.

WARN Obligations

Terminating multiple employees may trigger requirements under another federal law, WARN, if a sufficient number of employees are affected. This law applies to any business that employs 100 or more employees (excluding part-time employees). Under the law, if an employment loss results in a “plant closing” or “mass layoff”, a qualifying employer must provide affected employees and certain government officials with at least 60 days’ advance notice of the event. Employers that fail to provide the requisite notice can be required to pay the affected employees’ back pay for each day of the violation, reimburse them for the loss of benefits and any medical expenses they incurred, and may also have to pay civil penalties.

ADR

The law in the USA generally favors the private adjudication of disputes, including arbitration.

Arbitration can apply to employment disputes and can cover the full range of potential claims that employees can raise against employers, including tort claims and claims based on the violation of federal employment statutes.

Under Georgia law, to constitute a valid contract, there must be, among other things, “the assent of the parties to the terms of the contract” (O.C.G.A. § 13-3-1). A party cannot be required to submit to arbitration any dispute that they have not agreed to submit. The party seeking to enforce an arbitration agreement must prove assent to the contractual terms. Some Georgia courts have interpreted O.C.G.A § 9-9-2(c)(9) as requiring that the clause to arbitrate be initialled by all signatories.

At-Will Basis

Generally, in Georgia, employees are employed on an at-will basis so that no “breach of contract” claims can be brought against the company upon an employee’s separation. A best practice in Georgia is to have “at-will disclaimers” included in offer letters as well as any employee handbooks/manuals that specify an employee remains at-will unless the company enters into a written agreement stating the contrary.

“With Cause” and “Without Cause” Agreements

Certain executives or other employees may have a written agreement that provides for termination “with cause” and “without cause” with the employee’s separation pay impacted by whether the employee was terminated “with cause” or “without cause”. For businesses that temporarily or permanently closed their operations due to the COVID-19 pandemic, and terminated employees as a result, those contracts would need to be reviewed to assess whether that unique business circumstance was covered by the employee’s agreement.

Labor Agreements

In union environments, the labor agreement between the parties controls employees’ terms and conditions of employment, including termination decisions. Violations of labor contracts are most often adjudicated in arbitration, including disputes over employee discharges.

Damages

Damages for contractual claims are most often tied to the alleged harm suffered. For instance, if an employee had a five-year employment agreement and argued it was terminated improperly three years prematurely, the employee, if successful, would be entitled to three years of pay.

It is important to note that some contracts may provide for one or both parties to receive attorney’s fees or other, additional categories of damages in the event they prevail in a dispute under the agreement, which can be significant sums.

The Fair Labor Standards Act (FLSA) requires that all covered non-exempt employees be paid at least minimum wage and overtime pay at no less than time and one half their regular rate of pay for all hours worked in excess of 40 in a single workweek. Many employers try to utilize independent contractors rather than employees in an attempt to avoid the minimum wage and overtime requirements imposed by federal law. As noted in 2.1 Aggressive Approaches by the National Labor Relations Board (NLRB) and 3.1 Defining and Understanding the Relationship, the Biden administration is hostile to such efforts and various federal agencies are expanding the definition of “employee” under various federal labor and employment statutes to limit employers’ efforts to misclassify employees as independent contractors. 

Under the FLSA, there are a number of potential wage-hour claims that can be brought by employees. The laundry list of potential wage- and hour-related legal issues can seem daunting and includes:

• classification of employees as exempt and non-exempt;
• classification of independent contractors and consultants;
• compensable v non-compensable work time;

• payroll docking policies and practices;
• “off-the-clock” and regular work time;
• meal periods, breaks and on-call time;
• overtime, commissions, bonuses, reimbursements and tip pooling;
• record-keeping and notice obligations;
• payments upon termination of employment;
• compensable time to be included in an employee’s hours; and
• calculation of overtime and deductions from pay.

In addition to the FLSA, states can impose requirements on employers concerning pay.

Collective and Class Actions

Claims under the FLSA are often brought in a class action under Federal Rule of Civil Procedure 23, or a collective action under Section 216(b) of the FLSA. Either framework allows a large number of employees citing similar alleged wage or compensation errors to join together against an employer to make claims for monetary and equitable relief. Potential damages include back pay, front pay, punitive or liquidated damages, and attorneys’ fees. Additional wage claims and penalties are available on a state-by-state basis.

One way to try to combat the risks and costs of collective and class actions is to require employees to sign class action waivers, whereby employees with disputes will have to individually adjudicate the dispute in arbitration. Such waivers must be carefully crafted to help ensure enforceability.

Exempt and Non-exempt Employees

In the aftermath of the pandemic, and with the rise of work-at-home or hybrid work-at-home policies, employers need to be aware of a rise in several types of claims. First, as a result of remote work, more employees avoid long commutes and their work is readily accessible at home. In the case of non-exempt employees, employers are facing potential overtime claims, as these employees work in excess of 40 hours. These types of claims are typically avoided by ensuring the employer carefully tracks hours worked, and requires accurate reporting of the same by employees. Employers need to confirm they have appropriate policies in place governing the accurate recording of hours worked, as well as management approval of overtime. For exempt employees, there is the possibility that such employees will start performing non-exempt work that, depending on the amount of such work performed, could leave the employer vulnerable to employees challenging their exempt status.

There are a variety of federal and state laws that protect employees who report perceived unlawful acts. Even if it is ultimately determined that the employee’s perception is wrong, the employee generally will still be protected unless the employer can establish that the employee knew they were making a false report. Legal protection is offered to employees for reporting on many types of conduct, including:

• on-the-job safety issues;
• violation of federal or state anti-discrimination laws;
• violation of the Affordable Care Act;
• wage payment violations;
• environmental violations;
• fraud against the government;
• financial misconduct, including false reporting of financial information or tax evasion; and
• misappropriation or misuse of investor funds in a public company.

Should a whistle-blower be disciplined or discharged in the wake of reporting such perceived unlawful acts, the employer must typically provide substantial evidence of its non-retaliatory reason for the discipline or discharge. Many statutes give the government entity authorized with evaluating these claims the power to reinstate a terminated employee before making a final decision on whether the termination was lawful.